Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James, Love to have your insight on NWL It updated today on net FUM increased by 0.4 Billion for Dec quarter and the market punished it by a fall of > 8% HUB did not do much better either What is MM current view. Cheers John
Hi John,
It was a disappointing quarter for all of the investment platform companies and Netwealth (NWL) was the hardest hit.
While they are still seeing FUA growth, the $2.1b of net inflows fell short of expectations of ~$3b. the miss driven by low investor sentiment weighing on retail inflows. Overall, Netwealth is a great business, but like it’s peers, they need scale to justify the ~39x price to expected earnings. Hub24 (HUB) trades on ~35x while the smallest of the bunch, Praemium (PPS) trades on nearly 14x, a discount we don’t believe is justified.
We own Praemium in the Emerging Companies Portfolio and prefer Hub24 to Netwealth, though we would consider either into a pullback.
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